TPP talks bogging down, meltdown alert

What was being spun as done is not – at least not yet. What was supposed to be ready for the big reveal Saturday morning is now on hold. Now it’s ‘maybe tomorrow, maybe not.’

The closing press conference was to be at 4 p.m.. Talks are now scheduled to extend into Sunday, which Japan on reluctantly agreed to. The talks appear to be tracking for another Maui Meltdown.

In a bid to inject some urgency, Japan’s TPP Minister, Akira Amari, told his US counterpart, Michael Froman, that the U.S. must wrap the negotiations today. Amari needs to return home for what is expected to be a cabinet shuffle, expected this week, but has agreed to stay one more day.

In many ways, the automotive package has few obvious differences from what was force fed to Canadian negotiators in Maui. There have been hints that the content has been increased for parts of interest to second- and third-tier manufacturers. The rules for designated parts are based on substantial transformation. Is is difficult to assess how different this is – but it appears to be a Japanese position which Canada and Mexico have bought.

The remaining unresolved issues — dairy and data protection for biologics — are still active negotiations.

Froman could try to push Canada and New Zealand into a deal on dairy and, given the need for both governments not to come home empty handed, he might succeed. But the Canada and New Zealand have their own politics to deal with and not just any deal will satisfy both sides.

This continuing impasse may be little more than a ritual stork dance for the folks back home In a New Zealand Herald report, Kiwi Trade Minister Tim Groser describes the negotiations as making ugly compromises something like swallowing dead rats … which is only good when compared to swallowing live rats. Groser says all of the participants have had to face ugly compromises.

Groser is colourful and always quoteable. I believe he must fight the good fight until he can say that he has held on as long as he could without being responsible for failure of the talks. Prime Minster John Key has left open the option that Ministers could reconvene around the time of the APEC Leaders Summit in Manila in mid-November. An option no one appears keen to pick up.

Where is Canada on the DRI (Dead Rat Index)? If history is any guide, at some stage, political considerations will likely trump negotiating objectives.

There is no advantage to Canadian Trade Minister Ed Fast closing off talks early on dairy, poultry and eggs. Far better for Canada to be forced into concessions to prevent failure of the talks. But not so long as to mess up the dog-and-pony shows to tout the deal which are feverishly being arranged by the Canadian Chamber of Commerce.

The biggest impediment to getting to ‘yes’ appears to be the length of protection for biological pharmaceutical patents, which are derived from living organisms. Australia is in no mood to be badgered by the US on data protection, particularly as their requests for additional sugar and dairy access have been rejected.

Froman has not been willing to meet these demands, nor is it likely he’ll meet Australia’s terms on data protection. However Inside U.S. Trade is reporting that the talks are inching toward a compromise, but the broader agreement is unlikely to come together before Sunday at the earliest.

Who will blink? It would appear that Australia would need to blink three times to meet the US demands and accept their niggardly market access offers. Froman would need to blink twice – on sugar and dairy.

If there is enough blinking – the focus will then shift to Chile and Peru – who have been adamant that they will not go beyond five years of patent protections. Chile appears to be more entrenched than Peru.

Chile appears to have the least at stake as it has existing FTA’s with all of the other TPP participants. Froman could appeal to Chile’s national pride and by granting the Geographic Indication rights for Pisco — a liqueur that Peru also claims as their own.

If no one blinks this time, there will be recriminations and posturing, and then another ministerial. But for the Obama administration, faced with an uncompromising Congress, the window to passage during his presidency is fast closing.

For Stephen Harper, a delay might be preferable to a less-than-stellar trade deal. And, since ‘nothing is settled until everything is settled,’ there’d be no tough pills to explain to Canadian electors.

It appears the Ministers will hold yet another plenary session at 10 PM- unless it is re-scheduled. Another failure to close after the Meltdown in Maui will not be helpful . Doha like. Former WTO director-general Pascal Lamy once said “old trade negotiations never die — they simply are never concluded.”